Testimony of

Peter Kornbluh
Senior Analyst
National Security Archive

October 19, 1996

Congresswoman Juanita Millender-McDonald, members of the
Black and Hispanic Caucus, and the Select Committee on
Intelligence, I want to thank you for affording me the opportunity to
both testify at, and be witness to, this important hearing.

The name of my organization, the National Security Archive,
sounds like the type of government agency that might be involved
in this scandal. I can assure you that we are not. We are a public
interest documentation center, specializing in obtaining the
declassification of internal national security documentation and
making it available to Congress, to journalists and to concerned
citizens to enhance the public debate over foreign policies that are
conducted in our name but often without our knowledge.

The Archive--which is nonpartisan and does not take a
position on legislation--often deals with documents that are
classified TOP SECRET for national security reasons but that, in
truth, have no real bearing on the security of our nation. Today,
however, I am happy to have the opportunity to share with you
declassified White House documents which indeed address a real
and present danger to the national security of this country, to the
security of our cities, of our households, and to the health, well-
being and personal security of each and every citizen in this room--
the scourge of drugs.

Let me say at the outset that I cannot speak to, nor provide
evidence for, the allegations that are stated and implied in the San
Jose Mercury News stories. Internal U.S. government documents on
the early years of the contra war that might shed light on the issues
reported by Gary Webb have not been declassified. Hopefully, public
pressure brought on the CIA, the Justice Department, the National
Security Council and the Drug Enforcement Agency will result in the
release of those documents.

But I can and will address the central premise of the story:
that the U.S. government tolerated the trafficking of narcotics into
this country by individuals involved in the contra war.

To summarize: there is concrete evidence that U.S. officials--
White House, NSC and CIA--not only knew about and condoned drug
smuggling in and around the contra war, but in some cases
collaborated with, protected, and even paid known drug smugglers
who were deemed important players in the Reagan administrations
obsessed covert effort to overthrow the Sandinista government in
Nicaragua.

Exactly two years ago this weekend, this issue came up during
Oliver North's failed run for Virginia's U.S. Senate seat. The
Washington Post ran an article which I have included in your packet
suggesting that North had failed to give important information on
the contras and drugs to the DEA. In response, Mr. North called a
press conference where he was joined by Duane Clarridge, the CIA
official who ran the contra operations from 1981 through mid 1984,
and the former attorney general of the United States, Edwin Meese
III. Mr. North called it a "cheap political trick...to even suggest that
I or anyone in the Reagan administration, in any way, shape or
form, ever tolerated the trafficking of illegal substances." Mr.
Clarridge claimed that it was a "moral outrage" to suggest that a
Reagan Administration official "would have countenanced" drug
trafficking. And Mr. Meese stated that no "Reagan administration
official would have ever looked the other way at such activity."

The documentation, in which Mr. North, Mr. Clarridge and Mr.
Meese all appear, suggests the opposite. Let me review it here
briefly:

l) KNOWLEDGE OF DRUG SMUGGLING

Oliver North's own diaries, and internal memoranda written to him
from his contra contact, reveal explicit reports of drugs trafficking.

On April 1, 1985, Oliver North was informed by his liaison with the
contras, Robert Owen, that two of the commanders chosen by the
FDN to run the southern front in Costa Rica were probably, or
definitively "involved with drug running."

On July 12, 1985, Oliver North was informed that the contras were
considering the purchase of arms from a supplier in Honduras. The
$14 million that the supplier had used to finance the guns, "came
from drugs."

On August 9, 1985, Oliver North was informed that one of the
resupply planes being used by Mario Calero, the brother of the head
of the largest contra group the FDN, was "probably being used for
drug runs into [the] U.S."

On February 10, 1986, North was informed by his liaison Robert
Owen that a plane being used to run materials to the contras was
previously used to run drugs, and that the CIA had chosen a
company whose officials had a criminal record. The company,
Vortex Aviation, was run by Michael Palmer, one of the biggest
marijuana smugglers in U.S. history, who was under indictment for
ten years of trafficking in Detroit at the same time as he was
receiving more than $300,000 in U.S. funds from a State
Department contract to ferry "humanitarian" aid to the contras.

In not one of these cases, Congresswoman Millander-
McDonald, is there any record of Oliver North passing this
important intelligence information onto proper law enforcement or
DEA officials. Out of the tens of thousands of documents
declassified during the Iran-Contra investigations, there is not a
telephone message slip, not a memo, not an e-mail, nor a letter.

We also know that Mr. North, who you remember thought it
was a "neat idea" to use the Ayatollah Khomeini's money to fund the
contras, was predisposed to use drug monies to fund the contras
when they ran short of cash. In 1984, during a drug sting the DEA
was attempting against leaders of the Medellin Cartel, he asked two
DEA agents if $1.5 million in cartel money aboard an informants
plane could be turned over to the contras. The DEA officials just
said no.

2) PROTECTION FOR DRUG SMUGGLERS

The case of José Bueso Rosa demonstrates the lengths to
which high White House and CIA officials were willing to go to
protect an individual who fit the classic definition of a "narco-
terrorist." General Bueso Rosa was involved in a conspiracy to
import 345 kilos of coke into Florida--street value $40 million. Part
of the proceeds were to be used to finance the assassination of the
president of Honduras. I think most people in this room would
agree that a major cocaine smuggler and would-be international
terrorist such as General Bueso Rosa should be locked up for life.
But because this general had been the CIA's and the Pentagon's key
liaison in Honduras in the covert war against Nicaragua, North,
Clarridge, and others in the Reagan administration sought leniency
for him. As North put it in an e-mail message U.S. officials
"cabal[ed] quietly to look at options: pardon, clemency, deportation,
reduced sentence." The objective of our national security managers
was not to bring the weight of the law down on General Bueso, but
to "keep Bueso from...spilling the beans." By the way, he ended up
serving less than five years in prison--in a white collar "Club Fed"
prison in Florida.

3) COLLABORATION WITH DRUG SMUGGLERS

It is the documentation on U.S. relations with another Latin
American general, General Manuel Noriega in Panama, that most
clearly demonstrates the shameless attitude of the highest U.S.
national security officials toward major drug smuggling into our
cities. General Noriega is currently serving 40 years in prison for
narcotics trafficking. All of us in this room remember that General
Noriega's involvement with the Medellín Cartel was so significant
that President Bush ordered the U.S. military to invade Panama to
arrest him, at the cost of American lives, Panamanian lives and
hundreds of millions of dollars.

The 1989 invasion of Panama was codenamed Operation Just
Cause. But in 1986, when U.S. officials had the same evidence of
Noriega's career as the Cartel's man in Panama, the Reagan
administration appeared to have another kind of "Just Cause" with
Gen. Noriega.

Shortly after the New York Times published a front page story
titled "Panama Strongman Said to Trade in Drugs, Arms, and Illicit
Money," General Noriega contacted Oliver North with a quid pro quo
proposal: help him "clean up his image" and he would have his
covert agents undertake major sabotage operations against
economic targets inside Nicaragua.

Instead of telling Noriega that he should rot in jail--as most
everybody in this room would have done--Oliver North supported
this quid pro quo proposal; indeed North even wanted to pay General
Noriega one million dollars, yes, one million dollars in money
diverted from the sale of arms to Iran, to carry out these sabotage
operations (which the contras would have then taken credit for). In
one of the most striking, and candid, electronic mail messages ever
written inside the White House, North wrote to his superior,
National Security Adviser John Poindexter that

"You will recall that over the years Manuel Noriega and I
have developed a fairly good relationship....The proposal
sounds good to me and I believe we could make the
appropriate arrangements."

And Admiral Poindexter authorized North to jet off to London
to meet secretly with Noriega and work out the details on U.S. help
to "clean up his image" and collaboration in the covert war. As
Poindexter declared in his electronic response: "I have nothing
against Noriega other than his illegal activities."

RECOMMENDATIONS:

Representative Millender-McDonald and other members of the
panel, this is but some of the documented evidence we have of the
attitudes and actions of high U.S. officials toward narcotics
trafficking and traffickers during the covert war against Nicaragua.
While these records do not address the issue of who knew what,
when, here in California, they do demonstrate a rather shocking
pattern of government behavior that demands an accounting.

The key question, it seems to me, is how that accounting can,
and should take place over both the short and long term future.
Allow me to conclude with several brief recommendations:

First, members of Congress should call on the President to
authorize his Intelligence Oversight Board to conduct a six month
inquiry into the questions of official knowledge, tolerance, and
complicity in drug trafficking during the covert operations against
Nicaragua during the 1980s. With all due respect to the inspector
general of the Justice Department and the CIA, an internal
investigation is not likely to result in the public disclosure of
information required to lay this scandal to rest. The Intelligence
Oversight Board is a far more independent body, and far more likely
to conduct a thorough investigation that can be declassified along
with supporting documentation for a public accounting.

Second, while you, and other Representatives patiently wait on CIA
director John Deutch to complete his internal review, you should
demand that the CIA immediately declassify a previous internal
investigation and report that the agency completed in 1988. This
report is already known to exonerate the CIA of wrongdoing. But
declassifying it, and all the files on which it was built, is likely to
give us a far greater sense of CIA awareness of contra/drug
operations, and the action or inaction of Agency officials in the face
of this awareness over the course a many years. If the CIA doesn't
have anything to hide, it should have no problem releasing this
documentation. Its refusal to do so up till now, I suggest to you,
should set off the alarm bells throughout the halls of Congress.

Third, a number of files should be released by the Justice
Department immediately. Those include files that were not turned
over to the Senate Subcommittee chaired by John Kerry in 1987
and 1988, particularly the files related to the so-called Frogman
case in San Francisco. Similarly the Justice Department should
release its never-filed indictment against Norwin Meneses and all of
the supporting prosecution files that went into drafting that
indictment, as well as all records relating to why that indictment
was never filed and is now locked away in a vault in San Francisco.

Fourth, all DEA investigative records on Meneses and Danilo
Blandón should be declassified immediately. In the case of Blandón,
the DEA must also release the files on his informant status,
including documentation on the deliberations to make him a high-
paid informant. The U.S. intelligence community just devoted
considerable resources to addressing the scandal of the CIA paying a
known torturer and assassin in Guatemala as an informant. Having
a major California drug dealer on the U.S. payroll as an informant
strikes me as demanding at least as an equal accounting.

Finally, let me say that although the National Security Archive
takes no position on legislation, I would personally hope that the
political and social organization and mobilization that has been
generated by public concern and the commitment of individuals like
Rep. Millender-McDonald, Rep. Maxine Waters, Senator Barbara
Boxer and others, will address the broader debate over the future of
covert operations and intelligence reform. When you think about it,
all of the CIA's major covert wars--in Indochina, in Afghanistan, and
in Central America--have had as their byproducts drug trafficking
and addiction. As the issue we are addressing here today suggests,
all too often, covert operations conducted against some obscure
enemy abroad have returned home to haunt the very people whose
security they are ostensibly designed to protect.

This scandal provides an opportunity--and a challenge--for the
American public to protect themselves from their protectors so that
five, ten, or twenty years from now, we will not be sitting again in
this gymnasium attempting to redress future crimes of state.